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CHAPTER 1

INTRODUCTION TO BANKING IN

INDIA


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INTRODUCTION TO BANKING IN INDIA

Banking in India originated in the last decades of the 18th century. The first banks were The General

Bank of India, which started in 1786, andBank of Hindustan, which started in 1790; both are now

defunct. The oldest bank in existence in India is theState Bank of India, which originated in theBank

of Calcuttain June 1806, which almost immediately became theBank of Bengal. This was one of the

three presidency banks, the other two being theBank of Bombayand theBank of Madras, all three of

which were established under charters from the British East India Company. For many years the

Presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1921

to form theImperial Bank of India, which, upon India's independence, became theState Bank of

Indiain 1955.

HISTORY

Indian merchants inCalcuttaestablished the Union Bank in 1839, but it failed in 1848 as a

consequence of the economic crisis of 1848-49. TheAllahabad Bank, established in 1865 and still

functioning today, is the oldest Joint Stock bank in India.(Joint Stock Bank: A company that issuesstock and requires shareholders to be held liable for the company's debt) It was not the first though.

That honor belongs to the Bank of Upper India, which was established in 1863, and which survived

until 1913, when it failed, with some of its assets and liabilities being transferred to theAlliance Bank

of Simla.

When theAmerican Civil Warstopped the supply of cotton toLancashirefrom theConfederate States,

promoters opened banks to finance trading in Indian cotton. With large exposure to speculative

ventures, most of the banks opened in India during that period fey and lost interest in keeping deposits

with banks. Subsequently, banking in India remained the exclusive domain of Europeans for nextseveral decades until the beginning of the 20th century.

Foreign banks too started to arrive, particularly inCalcutta, in the 1860s. TheComptoire d'Escompte de

Parisopened a branch in Calcutta in 1860, and another inBombayin 1862; branches in

MadrasandPondicherry, then a French colony, followed.HSBCestablished itself inBengalin 1869.

Calcutta was the most active trading port in India, mainly due to the trade of theBritish Empire, and so

became a banking center.

Around the turn of the 20th Century, the Indian economy was passing through a relative period of

stability. Around five decades had elapsed since theIndian Mutiny, and the social, industrial and other
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infrastructure had improved. Indians had established small banks, most of which served particular

ethnic and religious communities.

The presidency banks dominated banking in India but there were also some exchange banks and a

number of Indianjoint stockbanks. All these banks operated in different segments of the economy.

The exchange banks, mostly owned by Europeans, concentrated on financing foreign trade. Indian joint

stock banks were generally under capitalized and lacked the experience and maturity to compete with

the presidency and exchange banks. This segmentation let Lord Curzon to observe, "In respect of

banking it seems we are behind the times. We are like some old fashioned sailing ship, divided by solid

wooden bulkheads into separate and cumbersome compartments."

During theFirst World War(19141918) through the end of theSecond World War(19391945), andtwo years thereafter until theindependenceof India were challenging for Indian banking. The years of

the First World War were turbulent, and it took its toll with banks simply collapsing despite theIndian

economygaining indirect boost due to war-related economic activities. At least 94 banks in India failed

between 1913 and 1918 as indicated in the following table:

Number of banks

that failed

Authorized capital

(Rs. Lakhs)

Paid-up Capital

(Rs. Lakhs)

1913 12 274 35

1914 42 710 109

1915 11 56 5

1916 13 231 4

1917 9 76 25

1918 7 209 1
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POST-INDEPENDENCE

Thepartition of Indiain 1947 adversely impacted the economies ofPunjabandWest Bengal,

paralyzing banking activities for months. India'sindependencemarked the end of a regime of

theLaissez-fairefor the Indian banking. TheGovernment of Indiainitiated measures to play an active

role in the economic life of the nation, and the Industrial Policy Resolution adopted by the government

in 1948 envisaged amixed economy. This resulted into greater involvement of the state in different

segments of the economy including banking and finance. The major steps to regulate banking included:

TheReserve Bank of India, India's central banking authority, was established in April 1934,but was nationalized on January 1, 1949 under the terms of the Reserve Bank of India (Transfer

to Public Ownership) Act, 1948 (RBI, 2005b).[1]

In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India(RBI) "to regulate, control, and inspect the banks in India"

The Banking Regulation Act also provided that no new bank or branch of an existing bankcould be opened without a license from the RBI, and no two banks could have common

directors.

Nationalization

Banks Nationalization in India: Newspaper Clipping,Times of India, July 20, 1969

Despite the provisions, control and regulations ofReserve Bank of India, banks in India except

theState Bank of Indiaor SBI, continued to be owned and operated by private persons. By the

1960s, the Indian banking industry had become an important tool to facilitate the development

of theIndian economy. At the same time, it had emerged as a large employer, and a debate had

ensued about the nationalization of the banking industry.Indira Gandhi, thenPrime Minister of

India, expressed the intention of theGovernment of Indiain the annual conference of the All

India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalization." The

meeting received the paper with enthusiasm. Thereafter, her move was swift and sudden. The Government of India issued an ordinance

('Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969'))

andnationalizedthe 14 largest commercial banks with effect from the midnight of July 19,

1969. These banks contained 85 percent of bank deposits in the country.Jayaprakash Narayan,

a national leader of India, described the step as a "masterstroke of political sagacity." Within

two weeks of the issue of the ordinance, theParliamentpassed the Banking Companies

(Acquisition and Transfer of Undertaking) Bill, and it received thepresidentialapproval on 9

August 1969.

A second dose of nationalization of 6 more commercial banks followed in 1980. The stated

reason for the nationalization was to give the government more control of credit
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Delivery. With the second dose of nationalization, the Government of India controlled around

91% of the banking business of India. Later on, in the year 1993, the government mergedNew

Bank of IndiawithPunjab National Bank. It was the only merger between nationalized banks

and resulted in the reduction of the number of nationalized banks from 20 to 19. After this, until

the 1990s, the nationalized banks grew at a pace of around 4%, closer to the average growth

rate of the Indian economy.

Liberalization

In the early 1990s, the thenNarasimha Raogovernment embarked on a policy ofliberalization,

licensing a small number of private banks. These came to be known asNew Generation tech-savvy

banks, and included Global Trust Bank (the first of such new generation banks to be set up), which

later amalgamated with Oriental Bank of Commerce,Axis Bank(earlier asUTI Bank),ICICI

BankandHDFC Bank. This move, along with the rapid growth in theeconomy of India, revitalized the

banking sector in India, which has seen rapid growth with strong contribution from all the three sectors

of banks, namely, government banks, private banks and foreign banks.

The next stage for the Indian banking has been set up with the proposed relaxation in the norms for

Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which

could exceed the present cap of 10%,at present it has gone up to 74% with some restrictions.

The new policy shook the Banking sector inIndiacompletely. Bankers, till this time, were used to the

4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning. The new wave ushered in a

modern outlook and tech-savvy methods of working for traditional banks.All this led to the retail boom

in India. People not just demanded more from their banks but also received more.

Currently (2010), banking in India is generally fairly mature in terms of supply, product range and

reach-even though reach in rural India still remains a challenge for the private sector and foreign banks.

In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong

and transparent balance sheets relative to other banks in comparable economies in its region. The

Reserve Bank of India is an autonomous body, with minimal pressure from the government. The statedpolicy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate-and

this has mostly been true.

With the growth in the Indian economy expected to be strong for quite some time-especially in its

services sector-the demand for banking services, especiallyretail banking, mortgages and Investment

services are expected to be strong. One may also expect M&As , takeovers, and asset sales.

In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak

Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to

hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any stake

exceeding 5% in the private sector banks would need to be vetted by them.
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In recent years critics have charged that the non-government owned banks are too aggressive in their

loan recovery efforts in connection with housing, vehicle and personal loans. There are press reports

that the banks' loan recovery efforts have driven defaulting borrowers to suicide

The Indian Banking System

scheduled banks of

india

schedeuledcommercial

banks

public

sectorbanks

nationalized banks

statebank of

india andassociate

banks

private

sectorbanks

oldprivatebanks

newprivatebanks

foreignbanks

Regional

ruralbank

scheduledurban co-operative

banks

scheduled state

co-operative

banks


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The formal banking system in india comprises the RBI , commercial banks , regional rural banks and

the co-operative banks.In the recent past,private non banking finance companies also have been active

in the financial system , and are being regulated by the RBI .

Reserve bank of India :

The RBI established in 1935, is the central banking and monetary authority in India. The RBI manages

the countrys money supply and foreign exchange and also serves as a bank for the government of

India and for the countrys commercial banks. In addition to these traditional central banking roles, the

RBI undertakes certain developmental and promotional roles. The RBI issues guidelines on various

areas including exposure standards, income recognition, asset classification , provisioning for nonperforming assets , long term lending institutions and non bank finance companies . The RBI requires

this institution to furnish information relating to their businesses to the RBI on a regular basis.

LOAN

A loan is a type ofdebt. Like all debt instruments, a loan entails the redistribution of financialassetsover time,

between thelenderand theborrower.

In a loan, the borrower initially receives or borrowsan amount ofmoney, called the principal, from the lender,

and is obligated to pay backor repayan equal amount of money to the lender at a later time. Typically, the

money is paid back in regular installments, or partial repayments; in anannuity, each installment is the same

amount.

The loan is generally provided at a cost, referred to asintereston thedebt, which provides an incentive for the

lender to engage in the loan. In a legal loan, each of these obligations and restrictions is enforced bycontract,

which can also place the borrower under additional restrictions known asloan covenants. Although this article

focuses on monetary loans, in practice any material object might be lent.

Acting as a provider of loans is one of the principal tasks forfinancial institutions. For other institutions, issuing

ofdebtcontracts such asbondsis a typical source of funding.

TYPES OF LOANS OFFERED BY THE BANKS

Secured

Asecured loanis a loan in which the borrowerpledgessome asset (e.g. a car or property) ascollateral.
http://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Assethttp://en.wikipedia.org/wiki/Assethttp://en.wikipedia.org/wiki/Assethttp://en.wiktionary.org/wiki/lenderhttp://en.wiktionary.org/wiki/lenderhttp://en.wiktionary.org/wiki/lenderhttp://en.wiktionary.org/wiki/borrowerhttp://en.wiktionary.org/wiki/borrowerhttp://en.wiktionary.org/wiki/borrowerhttp://en.wikipedia.org/wiki/Moneyhttp://en.wikipedia.org/wiki/Moneyhttp://en.wikipedia.org/wiki/Moneyhttp://en.wikipedia.org/wiki/Annuity_(finance_theory)http://en.wikipedia.org/wiki/Annuity_(finance_theory)http://en.wikipedia.org/wiki/Annuity_(finance_theory)http://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Contracthttp://en.wikipedia.org/wiki/Contracthttp://en.wikipedia.org/wiki/Contracthttp://en.wikipedia.org/wiki/Loan_covenanthttp://en.wikipedia.org/wiki/Loan_covenanthttp://en.wikipedia.org/wiki/Loan_covenanthttp://en.wikipedia.org/wiki/Financial_institutionhttp://en.wikipedia.org/wiki/Financial_institutionhttp://en.wikipedia.org/wiki/Financial_institutionhttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Secured_loanhttp://en.wikipedia.org/wiki/Secured_loanhttp://en.wikipedia.org/wiki/Secured_loanhttp://en.wikipedia.org/wiki/Pledge_(law)http://en.wikipedia.org/wiki/Pledge_(law)http://en.wikipedia.org/wiki/Pledge_(law)http://en.wikipedia.org/wiki/Collateral_(finance)http://en.wikipedia.org/wiki/Collateral_(finance)http://en.wikipedia.org/wiki/Collateral_(finance)http://en.wikipedia.org/wiki/Collateral_(finance)http://en.wikipedia.org/wiki/Pledge_(law)http://en.wikipedia.org/wiki/Secured_loanhttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Financial_institutionhttp://en.wikipedia.org/wiki/Loan_covenanthttp://en.wikipedia.org/wiki/Contracthttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Annuity_(finance_theory)http://en.wikipedia.org/wiki/Moneyhttp://en.wiktionary.org/wiki/borrowerhttp://en.wiktionary.org/wiki/lenderhttp://en.wikipedia.org/wiki/Assethttp://en.wikipedia.org/wiki/Debt


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Amortgage loanis a very common type of debt instrument, used by many individuals to

purchasehousing. In this arrangement, the money is used to purchase the property. The financial

institution, however, is given securityalienon the title to the houseuntil the mortgage is paid offin full. If the borrowerdefaultson the loan, the bank would have the legal right to repossess the house

and sell it, to recover sums owing to it.

In some instances, a loan taken out to purchase a new or used car may be secured by the car, in much

the same way as a mortgage is secured by housing. The duration of the loan period is considerably

shorteroften corresponding to the useful life of the car. There are two types of auto loans, direct and

indirect. A direct auto loan is where a bank gives the loan directly to a consumer. An indirect auto loan

is where a car dealership acts as an intermediary between the bank or financial institution and the

consumer.

Unsecured

Unsecured loans are monetary loans that are not secured against the borrower's assets. These may be

available from financial institutions under many different guises or marketing packages:

credit carddebt

personal loans

bankoverdrafts

credit facilities or lines of credit

corporate bonds(may be secured or unsecured)

Theinterest ratesapplicable to these different forms may vary depending on the lender and the

borrower. These may or may not be regulated by law. In the United Kingdom, when applied to

individuals, these may come under theConsumer Credit Act 1974.

Interest rates on unsecured loans are nearly always higher than for secured loans, because an unsecured

lender's options for recourse against the borrower in the event of default are severely limited. An

unsecured lender must sue the borrower, obtain a money judgment for breach of contract, and then

pursue execution of the judgment against the borrower's unencumbered assets (that is, the ones not

already pledged to secured lenders). In insolvency proceedings, secured lenders traditionally have

priority over unsecured lenders when a court divides up the borrower's assets. Thus, a higher interest

rate reflects the additional risk that in the event of insolvency, the debt may be uncollectible.
http://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Househttp://en.wikipedia.org/wiki/Househttp://en.wikipedia.org/wiki/Househttp://en.wikipedia.org/wiki/Lienhttp://en.wikipedia.org/wiki/Lienhttp://en.wikipedia.org/wiki/Lienhttp://en.wikipedia.org/wiki/Default_(finance)http://en.wikipedia.org/wiki/Default_(finance)http://en.wikipedia.org/wiki/Default_(finance)http://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Overdrafthttp://en.wikipedia.org/wiki/Overdrafthttp://en.wikipedia.org/wiki/Overdrafthttp://en.wikipedia.org/wiki/Corporate_bondhttp://en.wikipedia.org/wiki/Corporate_bondhttp://en.wikipedia.org/wiki/Interest_ratehttp://en.wikipedia.org/wiki/Interest_ratehttp://en.wikipedia.org/wiki/Interest_ratehttp://en.wikipedia.org/wiki/Consumer_Credit_Act_1974http://en.wikipedia.org/wiki/Consumer_Credit_Act_1974http://en.wikipedia.org/wiki/Consumer_Credit_Act_1974http://en.wikipedia.org/wiki/Consumer_Credit_Act_1974http://en.wikipedia.org/wiki/Interest_ratehttp://en.wikipedia.org/wiki/Corporate_bondhttp://en.wikipedia.org/wiki/Overdrafthttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Default_(finance)http://en.wikipedia.org/wiki/Lienhttp://en.wikipedia.org/wiki/Househttp://en.wikipedia.org/wiki/Mortgage_loan


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CLASSIFICATION OF LOANS

In India the bank loans are classified on the following basis.

Performing Assets:

Loans where the interest and/or principal are not overdue beyond 180 days at the

end of the financial year.

Non-Performing Assets:

Any loan repayment, which is overdue beyond 180 days or two quarters, is

considered as NPA. According to the securitization and reconstruction of financial assets

and enforcement of security interest ordinance, 2002 non-performing asset(NPA)means an asset or account of a borrower, which has been classified by a bank or

Financial institution as sub-standard, doubtful or loss asset, in accordance with the

Directions or guidelines relating to asset classifications issued by the Reserve Bank

Internationally, income from non-performing assets is not recognized on accrual

basis, but is taken into account as income only when it is actually received. It has been

Decided to adopt similar practice in our country also. Banks have been advised that they

should not charge and take to income account the interest on all Non-performing assets.

An asset becomes non-performing for a bank when it ceases to generate income


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Loan Policy

State Bank of Mysore (SBM) Loan Policy (hereinafter referred to as The Loan Policy or ThePolicy) is aimed at accomplishing its mission of all-round growth with maximum profits, a positionof pre-eminence in banking, committed to excellence in customer, shareholder and employee

satisfaction, with continuing emphasis on its Development Banking role, achieved through a skilled

and committed workforce and technological upgradation.

The Loan Policy of the bank has successfully withstood the test of time and with in-built flexibilities,

has been able to meet the challenges in the market place. The policy exists and operates at both

formal and informal levels. The formal policy is well documented in the form of circular instructions,

periodic guidelines and codified instructions, apart from the Book of Instructions, where procedural

aspects are highlighted.

The policy, at the holistic level is an embodiment of the bank's approach to sanctioning, managing

and monitoring credit risk and aims at making the systems and controls effective.

The Loan Policy also aims at striking a balance between underwriting assets of high quality, and

customer oriented selling.

LOAN SCHEMES

Personal Loans

EligibilityIndividuals, employees of state / central government, Public Sector undertakings, reputed profit

making Public limited companies, Multi national companies with a minimum service of two

years and drawing a net salary of Rs. 6,000/- or above.

PurposeTo meet personal expenses like marriage, family functions, medical expenses, travel etc.,

Loan AmountUpto Rs. 1.50 lacs depending on repayment capacity of the individuals.

SecurityThird party guarantee of equal means. Securities like LIC policies, NSC, KVIP, Shares etc.,

Period of Repayment12 months to 36 months.


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Type of LoanDemand loan.

Processing Fee1% of loan amount (one time).

Mortgage Loan

EligibilityIndividuals, employees, professionals, self-employed and others who are income tax assessee

whose net monthly income is of Rs. 12,000/- for salaried persons or net annual income of Rs.1,50,000/- in case of others and self-employed.

AGEMaximum age - 65 years.

Loan AmountRs. 1.00 lac to Rs. 50.00 lacs

Salaried Class - Maximum 36 times net monthly income.

Others - Maximum three times the net annual income.

Type of LoanTerm loan or current account overdraft

SecurityEquitable mortgage of unencumbered residential house / flat or urban commercial or industrialproperty in the name and possession of the borrower, either self acquired or vacant property.

Rented out property will be accepted as security only where lease is in existence in favour of

corporation of good standing and repute. Power of attorney authorising the Bank to collect rentshould be given.

Margin

50% of the market value of the security.

Period of RepaymentRepayable in 84 equated monthly instalments.

Processing Fee1.25% of the loan amount (one time)


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INSURANCEThe property being mortgaged should be insured against the risk of fire / riot / earthquake /

lightning / floods etc.,

Housing Loan

Under Personal Segment, You can avail a loan for

Construction or Purchase of a new house or flat Repairs / Renovation / Extension ofexisting house

For purchase of plot for construction of house within two years For purchase of built houses not more than 15 years old

Housing loan against II charge

For Purchase of Furnishings / Consumer durables as part of the project

Quantum of Loan amount

Loan amount for all categories

Net Annual Income EMI /NMI

Ratio

Upto Rs. 60000/- 20%

Above Rs. 60000 to less than Rs.1,20,000/- 25%

Above Rs. 1,20,000/- to less than Rs.2,00,000/- 30%

Above Rs. 2,00,000 to less than Rs.5,00,000/- 50%

Above Rs. 5,00,000 to less than Rs.10,00,000/- 55%

Above Rs. 10 lacs 65%


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Maximum Repayment period

Age Repayment

periodFor persons below 35 years of age 25 years

For persons below 45 years of age 20 years

For persons above 45 years of age 15 years

Margin

Amount Margin (%)

Upto Rs. 30 lakhs 20%

Above Rs. 30 laks to 75 lakhs 20%

Above Rs 75 lakhs to 1.00

Crore25%

Above Rs 1.00 crore 40%

Margin for Purchase of New houses which are ready for possession (Applicable to First sale

only)

Amount Margin (%)

Upto Rs. 75 lakhs 15%

Above Rs.75 laks to 1 cr 20%

Above Rs 1.00 crore 30%

InterestPenal interest of 1% in case of default of three or more consecutive instalments.

Loan amount Processing Charges (w.e.f. 01.06.2011)

Upto Rs 25 Lacs 0.25% of loan amount, with a minimum of Rs

500/-


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Above Rs 25 Lacs and upto Rs 75Lacs

Rs 10,000/-

Above Rs 75.00 Lacs Rs 20,000/-

InsuranceThe house property has to be insured covering all risks. Group insurance is available to cover the

life of the borrower on payment of one time upfront premium.

DisbursementDirect to the sellers in case of purchase.For Construction / Repairs / Renovationsin a phased manner

RepaymentRepayable in monthly instalments. Repayment period ranging from 5 to 25 years, including a

moratorium period ranging from 6 to18 months from the date of the first disbursement.

Schemes and Interest Rates are subject to changes from time to time.

Attractive features of State Bank of Mysores Housing Finance scheme

Loans from State Bank of Mysore are cheaper than housing finance agencies /companies.

Nominal processing charges.

No administration charges.

No commitment charges.

Interest charged on reducing balances. Facility available at all branches in India.

Exemption from wealth tax for one house under Wealth Tax Act.

Pre-payment Penalty

No Pre-closure / Pre-payment penalty on all Home Loans.

Happy Home- Consumer Durable Loan Scheme

Happy Home Loan

PurposeState Bank of Mysore is now at your doorsteps to provide you all good things in life you have

been craving for. You richly deserved them but couldnt buy them perhaps for want of readycash. Here is where State Bank of Mysore steps in to solve your problems and make your home a

Happy Home. Colour TV Sets, VCRs, Refrigerators, Cars, Scooters, Mopeds, Washing


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Machines, Mixers / Grinders, Coolers, Air conditioners, Furniture and what have you? All these

goodies brought to you within your reach under State Bank of Mysores Happy Homes Scheme.

Highlights of the Scheme

Tailor-made for employees of Govt / Public Sector undertakings,

Corporations, Private Sector Companies, Police, Defence forces andreputed establishments with a minimum of 5 years service. Professionals,

Self-employed with a minimum of 5 years standing.

Net monthly salary / income should be Rs.2000/-

75% of the cost of the articles.Maximum loan of Rs. 1.00 lac or eight

times the net monthly income / salary of the borrower whichever is lower.

Repayable in 36 to 60 months.

Minimum loan amount Rs. 10000/-. Demand Loans upto Rs.25000/-

payable in 36 months. Demand Loans above Rs. 25000/- repayable in 36

months Term loans repayable in more than 36 months and upto 60

months.

Simple security needed.

Hypothecation of assets created (articles bought)

Third party guarantee acceptable to the bank if check off facility is

not available.

Insurance Cover

Vehicles bought to be insured for full value.

For articles above Rs.10000/- insurance will be for market value

or atleast 110% of the loan amount whichever is higher.

A small one-time service fee of 1% of the loan amount.


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Specially for the Salaried class for purchase of two-wheelers

Minimum net salary of Rs.2000/- per month with availability of check off

system.Loan sanctioned upto 90% of the cost of vehicle or 12 times the net monthly

income whichever is less. Gross deduction including loan instalment should

not exceed 33% of the gross salary.Maximum - Rs. 4.00 lacs or 80% of the

cost of vehicle +1%.

Second hand cars - 60% of market value; not older than 5 years; Maximum

loan - Rs. 2 lacs.

Repayable in 36 months, may be extended upto 60 months

Security offered should be:

Hypothecation of vehicle

Registration of hypothecation charge with Regional Transport

Authority.

Third party guarantee

Vehicle should be insured for full value.

One-time service fee of 1% of loan amount.

Gnanamitra Educational Loan

PurposeTo enable students with academic brilliance to meet tuition and other fees / maintenance costs /

books and equipment and cost of passage for studies abroad etc., for pursuing studies at

recognised school / college / institution.

Courses Eligible- Higher Studies

Diploma / Graduate / Post-graduate courses in the faculties of Engineering, Technology,Architecture, Medicine, Dental Science, Agricultural Science, Veterinary Science and Computer

Certificate courses of reputed institutes accredited to department of electronics or affiliated to

university


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Limit

Amount of loan

(in Indian Rupees)

MIN(Rs.) MAX(Rs.)

Higher Education- In India 10000 10.00 lacs

Higher Education- Abroad 10000 20.00 lacs

Margin

Upto Rs. 4.00 lacs Nil

Above Rs. 4.00 lacs -

For studies in India 5%

For studies abroad 15%

INTEREST RATES: SCHEMES AND INTEREST RATES ARE SUBJECT TO CHANGES

FROM TIME TO TIME.

Second Educational LoanTo enable the students for taking higher education, provided the student secures 60% marks inexisting course. The second loan is to be availed only from the branch where the first educational

loan has been sanctioned.

RepaymentTechnical / Professional Higher studies in India / AbroadRepayment of loan to commence immediately after disbursal, by the parent / guardian, out of his/ her income. Installments may be nominal (to cover interest portion, at least) during the period

the student is undertaking the studies. The installments will be stepped up one year after the

completion of the course or after the student gets a job, whichever is earlier, so that the loan gets

repaid together with interest within a period of 60 to 84 months thereafter.


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Security

Amount. Security

Upto Rs. 4.00 lacs NIL

Above Rs. 4.00

lacs and upto Rs.

7.50 lacs

Collateral in the form of a suitable 3rd party guarantee

Above Rs. 7.50

lacs and upto Rs.10.00 lacs

Collateral security by way of immovable property or equal to the loan

amount in the form of Government securities / NSCs / Units of UTI

Guarantee of parents / guardians (in the case of minors, the parent / guardian

will execute the documents on behalf of the minor and also in his capacity as

co-borrower) / third party guarantee where sufficient collateral security is notavailable

InsuranceAn insurance policy will be taken on the life of the student borrower for an amount equivalent to

the loan amount and the policy should be convertible whole-life one for 25 / 30 years,

convertible after 5 years into one with endowment benefits. The Bank will pay the insurancepremia on the policy by debiting it to the loan account. On liquidation of the loan, the policy will

be reassigned and delivered to the borrower.

RepaymentCompletion of course + 1 year or 6 months after getting a job, whichever is earlier.The interest to

be debited monthly on simple basis during the repayment holiday / moratorium period. Penal

interest @2% will be charged for amount above Rs. 2 lacs for the overdue amount and overdueperiod. Interest concession of 1% per annum is available, provided the interest is repaid

during moratorium period as and when the interest is applied.

MyBank Scholar Loan

MYBANK SCHOLAR- A SCHEME FOR STUDENTS OF PREMIER AND REPUTED

INSTITUTIONS

PurposeLoans will be granted to deserving/meritorious students for pursuing full time courses in India atselected premier and reputed institutions identified by the Bank.

EligibilityThe applicant should be an Indian National and should have secured admission to full time

professional/ technical courses in selected elite institutes


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Eligible Expenses

Fee payable to college/school/ hostel Examination/ Library/Laboratory fees

Purchase of books/equipments/ instruments/ uniforms

Caution deposit/ building fund/ refundable deposit supported by institution bills/receipts

[not to exceed 10% of tuition fees for the entire course]

Purchase of computers, if essential for completion of course

Any other expense required to complete the course like study tours, visits to foreignuniversities in exchange programs, project work, thesis, etc

Institutes & loan amount:Presently 100, which include IIMs and IITs etc. Maximum loan amount Rs.15.00 lacs depending

upon the course/institute.

Courses coveredRegular full time Degree/Diploma Courses and not certificate/part-time courses, through

entrance test/ selection process. In case of IIMs full time Executive Management Courses likePGPX are covered

A) 2.50% above BASE RATE (Refer Interest rates)

B) Simple Interest to be charged during moratorium/ repayment holiday. Interest concession of1% for the entire period of loan if the interest is serviced during course period and moratorium.

This concession will be released in two stages.

Margin:

Upto Rs. 4 lacs: Nil. Above Rs.4 lacs: 5%

Scholarship/ assistantship to be included in the margin

Margin may be brought in on year to year basis as and when disbursements are made on a

pro-rata basis

Security:Co-obligation of parent/guardian. In case of married person, co-obligation can either be ofspouse or parent/parent-in-law.

Processing FeeNil

Moratorium PeriodUp to 6 months after completing the course.


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RepaymentMaximum 5-7 years after commencement of repayment

car Loan Scheme

For New Cars:

Salient features of the scheme:

Purpose:

For the purchase of new passengers Cars, Jeeps, Multi Utility Vehicles (MUV) and SUVs.

Eligibility:Individuals between the age group of 21 years to 65 years.

Annual Income:

Salaried class with an annual income of Rs. 2,50,000/- & above. Self employed & Professionals

with an annual income of Rs.2,50,000/- & above.

Loan amount:

For salaried persons: 48 times of the Net Monthly Income

For others: 4 times of the Net Annual Income

The income of the spouse can be included for arriving at the loan amount, provided spouse joinsas co-borrower.

Margin: 15%

Security:1) Hypothecation Charge over the car.

2) Noting of Banks lien with the R.T.O.


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3) Third party guarantee (if there is a need)

Repayment: the loan to be repaid in 84 EMIs (Maximum)

Insurance:Comprehensive insurance cover for the full value of the vehicle.

Service Charges:

0.50 % of the loan amount with a minimum of Rs.500/- and maximum of Rs.10,000/-

Prepayment charges: No Pre Closure / Pre Payment penalty on all car loans.

FREE ACCIDENT INSURANCE COVER (DEATH RISK ONLY)

Papers to be submitted:

1. Statement of Bank account of the borrower for last 12 months.2. 2 passport size photographs of borrower/guarantor.3. Signature identification from bankers of borrower/guarantor.4. A copy of Passport /Voters ID card/PAN card.5. Proof of residence by way of tax receipts, telephone bill, electricity bill or any other

document that comply with the regulatory and/or KYC requirements.

6. Latest salary-slip showing all deductions and TDS Certificate-Form 16 in case of salariedpersons.

7. Copy of Income tax Return for the last 2 financial years duly acknowledged by the ITOfor professionals, Self employed and others.

8. Proof of official address for non-salaried individuals.9. Proforma invoice of the vehicle.

For Used Cars:


Purpose:For the purchase of passengers Cars, Jeeps, Multi Utility Vehicles which are not more than 5

years old.

Valuation:Certificate of fitness / valuation from a reputed garage is required.


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Repayment:The loan has to be repaid within 7 years from the date of original purchase of the vehicle.

Loan for purchase of residential site / plot

EligibilityIndividuals not above the age of 60 years with a steady source of income

PurposeTo purchase site / plot by BDA / Housing Board / District Urban Development Authority / City

Improvement Trust Board / Municipal Corporation / State Development Authority, on first sale

only

Loan Amount24 times net monthly income / 2 years annual income (subject to production of satisfactoryproof) or 80% of the cost of the site whichever is less

Income of SpouseFor arriving the quantum of loan, income of the spouse may be considered where the allotment

will be in single name and spouse stands as guarantor

Other Income

Regular income of the borrower from all sources can be considered subject to the satisfactoryproof of the income

Margin20% of the cost of site / plot

Type of AccountMedium Term Loan Account

RepaymentMaximum of 60 months in equated monthly instalments

Processing FeeRs. 500/- flat per account


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SecurityEquitable Mortgage of the site / plot to be purchased

Other Conditions

a) The letter of allotment / agreement for sale from the Housing Board / BDA / District Urban

Development Authority / City Improvement Trust Board etc., should be obtained

b) A letter signed by the allottee duly expressing his / her intention to create the Mortgage

(equitable / registered) in favour of the Bank to be obtained and forwarded to the allotting agency

c) The said letter should also contain a direction to the allotting agency to hand over the

Documents directly to the Bank / Bank's Representative after registration of the property

d) A letter of undertaking to be obtained from the site allottee to the effect that a house will be

constructed in due course and the relative site will not be sold on commercial consideration

MYBANK ARAKSHAK

Personal loan scheme for Police PersonnelThis scheme is introduced to assist the Police Personnel to avail the loan hastle free

EligibilityAll Police Personnels (Permanently employed)

PurposePersonal loan for any purpose including purchase of consumer durables

Loan Amount10 times net monthly income with a maximum of Rs.1.50 lac

Income of SpouseSpouse income may be considered to arrive at the eligible loan amount provided spouse is also

employed (permanent employment) and stands as guarantor

Type of AccountDemand Loan Account


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MarginNil


Processing FeeRs.250/- flat.

SecurityUpto Rs.25,000/- Nil

Above Rs.25,000/- check off facility. NSC,LIC policy may be insisted for security whereverpossible or third party guarantee of equal means

Other Conditions/RequirementsLoan Recovery through check off facility

MYBANK ADHYAPAK

Personal loan scheme for teacher community

EligibilityPermanent Teachers / Non-Teaching Staff of Central / State Govt. Educational Institutions and

also Teachers and Non-Teaching Staff of Govt. Recognised Schools / Colleges / Aided

Institutions

PurposePersonal Loan for any purpose including purchase of consumer durables


Income of SpouseSpouse income may be added to arrive at the eligible loan amount provided spouse is alsoemployed and stands as guarantor.


MarginNil
http://www.statebankofmysore.co.in/index.php/advances/personal-banking-.html#Top


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Processing FeeRs.250/- flat

SecurityUpto Rs.25,000/- Nil (only Check off facility).Above Rs.25,000/- check off facility. NSC,LIC policy may be insisted for security wherever

possible or third party guarantee of equal means

MYBANK UTSAV

Personal loan scheme for individuals for meeting expenditure related to Festivals

Eligibilitya)Employees of State / Central Govt.,/ PSUs / profit making Public / Private Ltd., Companies,Institutions etc., with a minimum of 2 years service.

b)Self employed persons with a minimum 3 years standing / experience.

c)Persons having regular source of income from verifiable channels like Pensions and Interest on

TDRs / NSCs / Govt. Securities etc.,

PurposeLoan to individuals for meeting expenditure related to Festivals

Minimum Net IncomeNet Monthly Income (NMI) of Rs.3000/- & above

Loan AmountFour times the net monthly income with a minimum of Rs.5000/- and a maximum of Rs.50,000/-

(Borrowers other than salaried people should produce acceptable proofs with respect to their

annual income)

SecurityPrimary - Nil

Collateral - personal guarantee of the spouse if employed, or any other person of adequate worthwhere check off facility is not available

Repayment PeriodMaximum of 12 months through EMIs. No penalty for prepayment


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Processing FeeRs.100/- per application

Type of LoanClean Demand Loan

DisbursementTo the borrowers by credit to their account

MYBANK ADHYAPAK

Personal loan scheme for teacher community

EligibilityPermanent Teachers / Non-Teaching Staff of Central / State Govt. Educational Institutions andalso Teachers and Non-Teaching Staff of Govt. Recognised Schools / Colleges / Aided

Institutions

PurposePersonal Loan for any purpose including purchase of consumer durables


Income of SpouseSpouse income may be added to arrive at the eligible loan amount provided spouse is also

employed and stands as guarantor.


MarginNil


Processing FeeRs.250/- flat


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SecurityUpto Rs.25,000/- Nil (only Check off facility).Above Rs.25,000/- check off facility. NSC,LIC policy may be insisted for security wherever

possible or third party guarantee of equal means

Sanjeevini

This scheme is introduced to provide timely assistance for obtaining Medical treatment for

Salaried class, Self employed persons, Employees of reputed PSUs, Profit making public limitedcompanies, Self employed engineers, Doctors, Architects, Chartered Accountants, MBAs,

Pesioners of PSUs, Govt. (state/central) public sector banks and also pensioners of State Bank of

Mysore.


Eligibility:a) Employees of Government, Reputed PSUs and profit making Public Limited

Compani, with a minimum of 10 years service

b) Self Employed Engineers, Doctors, Architects, Chartered Accountants, MBAs, with

a minimum 5 years standing. They should be below 65 years of agec) Pensioners of PSUs / Govt. (State/Central) Public Sector Banks who have taken

premature voluntary retirement and are 60 years of age or less, including pensioners of

SBM

d) Agents of Insurance / KVP / Mutual Funds etc., who are tax assesees and whosegross annual income exceeds Rs. 1.50 lacs. The facility will be considered only if a

power of attorney or mandate is registered with the principal organisation with which

the agent deals, authorising them to remit the commission direct to the Bank.Provided, however, that if the person treated happens to be a minor Son / Daughter of

an eligible applicant, the loan can be extended to the Parent earning

Income Criteria:a) For Employees / Pensioner - Net monthly income Rs. 6000/-b) For Self Employed Person - Net annual income of Rs. 1,50,000/- as per latest I.T.

Returns

c) For Agents - Gross income exceeding Rs. 1.50 lakh per annum (to produce latestI.T. Returns)

d) Income of the spouse can be considered if the spouse guarantees the loan

Loan Amount:Minimum Rs. 20,000/-Maximum 12 months net monthly income, Net of all deductions, including Income

Tax for salaried individuals and pensioners and 1 year's net annual income in case ofSelf-employed professionals subject to the ceilings as below:

Employees and Professionals: Rs. 1.50 lacs


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Pensioners who have taken early retirement and Agents under eligibility above Rs.

1.00 lac

Margin:15 % of the total cost of Hospital bill

Rate of Interest: (wef 10.08.2008)

With check-off facility 15.25%

Without check-off facility 15.50%

Type of Loan: Medium Term Loan

Security: Tangible Collateral Security.

Procesing fee:0.50% with a maximum of Rs. 500/-.

Disbursal:1. Directly to hospital against production of bills or

2. Payment against indents from hospital3. Reimbursement may also be considered within 15 days from the date of discharge

when payment has already been made

Repayment:Minimum -36 months

Maximum 72 months - out of Salary / Pension /Professional Income / Agricultural

Income

Age limit:Maximum 65 years

Other Conditions:

In case of Pensioners any one earning member of the family should be a co-borrower

If salaried person is accepted as co-borrower / Guarantor, check-off facility to be

obtained

For professionals, minimum 2 years of Income tax assesment should be obtained


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Samachar

This product has been introduced to meet the needs of journalist community who are directly

involved in providing updated happenings over the globe.

For purchase of Cameras, Computer, Books, Two wheelers, Mobile phones etc., for permanentemployees of leading Newspapers.


Eligibility:a) Permanent employees of Leading Newspapers

b) Minimum net salary Rs. 5000/- per month

Loan Amount:a) 12 times of Net monthly income.

b) Minimum Rs. 10000/-. Maximum Rs. 1,00,000/-

Margin:10%

Type of Loan: Term loan repayable in 36 - 60 months

Security:Hypothecation of the articles / Vehicles purchased

Guarantee:i) No guarantee needed if check-off facility is available

ii) Acceptable third party guarantee if check-off facility is not available

Insurance:10% above the market value of articles

Processing Charges:0.50% with a maximum of Rs. 500/-

Disbursal:Direct to the dealer

Necessary papers to be given by the applicants:1. Application form

2. Credit Declaration form

3. Salary Certificate4. Income Tax returns copy

5. Statement of Bank account for the last 6 months

6. Undertaking from the employer to deduct instalments


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7. 3 photographs of applicant / guarantor 8. Undertaking that articles are allowed to be

inspected any time by the Bank officials

ADVANCES

Population group wise classification of Gross Advances

The population group-wise classification of the Banks Gross Advances is as under:

(Rs. in crores)

As on

March 31,

2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31

2010

Sept 30

2011

Rural 750.62 735.02 854.44 982.24 1187.42 1294.39

Semi-Urban 619.64 925.30 1062.82 1223.80 1491.19 1592.44

Urban 871.49 877.36 895.03 1040.34 1374.68 1470.30

Metropolitan 2287.29 2636.29 2740.35 3385.96 5071.22 6010.28

Total 4529.04 5173.97 5552.64 6632.34 9124.51 10367.41


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Chapter 2

RSEARCH Design


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DESIGN OF THE STUDYResearch design

2.1 Introduction

Any amount borrowed or lent is called a loan. If money is borrowed it is debt of business and if

loan is given, it is receivable for the business.

Loan is a method of lending under which bank gives credit to a borrower for a fixed period and

for a specific purpose. Loan are promises for future payment, they have to be repaid in periods

beyond a year and are, therefore long term liabilities.

The process of granting of loans and advances post credit worthy evaluation of the borrower

coupled with the legal documentation is more often than not , reinforced by a strong recovery

and monitoring process. The risks associated with adverse selection and moral hazard are to be

prevented at any cost

2.2 Review of literature


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2.3Statement of the Problem

SBM is one of the nationalized banks in India which provides loans and advances when it is

required by individual or companies and accepts the deposits from public. Being in the business

of primarily lending and taking deposits, State Bank of Mysore has a track record of low credit

risk manifestation. Yet given the global recessionary trend, the Indian banks have also not been

spared. The banking sector has, over the years, witnessed increasing trend of delinquent loan

accounts.

This study is focused at evaluating the credit management process at the State Bank of Mysore,

Bangalore. The thrust will be on evaluating the quality of the loans and the level of non-

performing assets in the loan portfolio.

At the end of the project the study will endeavor to find a conclusion to the question as to

whether the State Bank of Mysore. Bangalore has managed its loan recovery system effectively

and efficiently

2.4 Objectives

To study different types of loans extended by the bank.

To study the procedure of granting loans and advances by the bank.

To evaluate the norms for sanctioning loans.

To confirm the non existence of the conditions of adverse selection and moral hazard.

To ascertain the credit risk management system at the bank.

To study about the lending policy followed by bank.

To know about the percentage of recovery of loans.

To know the techniques used by the bank to recover the loans.


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2.6 Limitation

This study is limited by resource and time constraints.

For the reasons mentioned above the study is restricted to only one Bank and in that direction

it may not be reflective of the pattern at the other banks.

Due to confidential nature of the record was not in a position to collect data in totality but

through a representative sampling technique will endeavor to overcome this limitations.

Detailed analysis was not possible because of non availability of the sufficient data.


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Chapter 3

COMPANY PROFILE


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3.1 History

State Bank of Mysore was established in 1913 as Bank of Mysore under the patronage of the

erstwhile government of Mysore, at the instance of the banking committee headed by the greatEngineer-Statesman, Late Dr Sir M Visvesvaraya. Subsequently, in March 1960, the bankbecame an Associate of State Bank of India. State Bank of India holds 92.33% of shares. The

bank's shares are listed in Bangalore, Chennai, and Mumbai stock exchanges.

SBM has a widespread network of 671 branches (as on 31.01.2009) and 20 extension counters

spread all over India which includes 6 specialized SSI branches, 4 Industrial Finance branches, 3Corporate Accounts Branches, 4 specialized Personal Banking Branches, 10 Agricultural

Development Branches, 3 Treasury branches, 1 Asset Recovery Branch and 7 Service Branches,

offering wide range of services to the customers.

The bank has a dedicated workforce of 9720 employees consisting of 3169 supervisory staff,6551 non-supervisory staff (as on 31.03.2008). The skill and competence of the employees have

been kept updated to meet the requirement of our customers keeping in view the changes in theenvironment. The paid up capital of the Bank is Rs.360 Millions as on 31.03.2008 out of which

State Bank of India holds 92.33%.The Bank has achixeved a capital adequacy ratio of 11.73% as

at the end of March 2008. The bank has an enviable track record of earning profits continuouslyand uninterrupted payment of dividend since its inception in 1913.

Total deposits of the bank as at the end of January 2009 is Rs 31817 Crores and the total

advances stood at Rs. 24713 Crores which include export credit of Rs. 10159.50 million. Theforex turnover of the bank crossed Rs 336963.50 million during the year March 2007 to March

2008 which is 44.66% higher.

State Bank of Mysore is the first Karnataka-based Bank with fully networked branches. The

bank is fully on 'CORE BANKING SOLUTION' from 31.12.2005. In record time of one

calendar year, the bank completed the exercise of converting all the branches to Core Banking toprovide the convenience of anytime, anywhere banking to all our valued customers.

State Bank of Mysore embarked upon the latest Banking Technology platform by implementing

the Core Banking Solutions (CBS) across all its branches, with an objective of providing banking

convenience to the customers.


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Services offered by the company:

Deposits

My bank Surakhshna- A unique deposit scheme linked with insurance cover has beenintroduced. Insurance cover to a maximum of Rs. 5 lakh on deposits held for 5 years and

more.

Saving Plus- In order to provide value added services to our Personal Segment customers,a new specialized auto sweep product for Personal Segment savings bank customers has

been introduced.

Saral Savings Bank account (No Frills account)- This account comes with very low

minimum balances as well as low / nil charges, to cater to the needs of individual fromthe vast sections of population who are, otherwise, not fulfilling certain conditions of our

existing Savings Bank requirements.

SBM Tax Saver Scheme (Tax saving scheme under Sec 80c of the IT act)A Bank TermDeposit Scheme 2006 has been introduced by the Central Government commencing from

the financial year 2006-07 wherein time deposits made upto Rs.1.00 lakh for a period of

5 years are exempted from payment of Income tax under Sec 80C

The following are the Deposit Scheme provided by State Bank of Mysore:

My bank Akshaya - Recurring Deposit Scheme(with flexibility)

The main feature of the scheme is that the depositors have an option to withdraw the monthly

installments remitted, after every 6 months or in multiples of 6 months. The maximum period of

deposit is 10 years.

Ananya Deposit Scheme

The scheme is made for retiring employees to deposit lumpsum amount and to get monthly

income of Rs.800/- or Rs.1000/- for 12, 24 or 36 months. The deposit may be further reinvested

once again

Multi Option Deposit Scheme

It combines the features of Current account, Savings Bank a/c, TDR or RID a/c. The product

proposes to give liquidity to the depositor with high returns and convenience. It provides the

depositor an automatic overdraft facility in Current a/c and automatic withdrawal of Termdeposits in units through SB a/c. Depositor has to simultaneously open TDR / RID a/c for

Rs.1000/-, SB a/c with balance Rs.500/- and Current a/c.

Long Term Floating Deposit account

A fixed deposit scheme for 5 & 8 years to get an additional interest of 0.25% and 0.5%


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respectively more on base interest rate (of 3 years deposit). The depositor has the option to

invest in long term maturity at a floating rate with an opportunity to gain in any upward

movement in interest rate. Minimum deposit of Rs.50000/-.

Savings Bank account

Customer can open an account with a deposit as low as Rs.100/- to Rs.300/-(Rs. 250/- for

chequebook facility and Rs.100/- without chequebook facility) depending upon the area and

earn interest at 3.5% (wef 01/03/2003) per annum. Computerized branches - Rs.500/- and for

Specialized hi-tech branches - Rs.2000/-

Term Deposits

In this scheme, customers can invest a lumpsum amount for a specific period from 15 days upto

120 months and collect interest at monthly (discounted), quarterly, half- yearly or yearly

intervals.

Reinvestment Deposits

According to this scheme, customers investment and interest for the specified period is paid

together at the end of the term. It gives the highest yield of interest on savings taking care of

customers future needs like marriage, house construction, children's higher education, etc.,

Period can be from 6 months upto 10 years

Mystar Deposit Scheme

Mystar deposit is a short-term deposit for 46 days where deposits along with interest areautomatically renewable upto a maximum of 6 times, without production of receipt on each

occasion.

Power Money

This is a flexible term deposit scheme. Deposits are accepted in units of Rs.500/- each with a

minimum of Rs.5000/- (10 units) for a period of 1-10 years. Part of the money deposited can be

withdrawn in units without loss of interest on premature withdrawal for the entire deposit.

Loans / Overdrafts can be availed upto 75% on the balance of units held

Recurring Deposits

In this scheme, the minimum monthly installment is Rs.20/- and is accepted in multiples of

Rs.5/- thereafter. Deposits are accepted from 6 months to 120 months


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Cash Certificate

In this scheme, customers pay an odd sum of money and receive a huge round sum. The period

of this scheme is from 6 months to 10 years, with quarterly compounding of interest.

Grameena Thevani Yojana

A special deposit scheme, with interest compounding quarterly for persons with seasonal

income like agriculture. Deposit in five yearly installments gets a huge sum after 10 years.

Perennial Income Plan

A novel pension plan for a tension free future specially for self-employed / daily wage earners

who are not covered under pension scheme. Customers save specified amount at regular

monthly intervals for a specified period of say, 7 / 10 years when young and energetic. They get

a regular monthly income after 7th / 11th year equal to or twice the monthly saving throughoutlife or get a huge sum for their large needs.

Super Savings Package

This is a plan which takes care of old age. Customers save a specified small sum every month for

15 or 25 years (renewed every 10 years) and it is re-cycled every 10 years to get the maximum

benefit of compound interest.

Bhagyalakshmi Deposit

This deposit is an ideal deposit scheme for housewives and employees. Customer save a smallamount every month for a specified period and the accumulated amount is invested for a

specified period to get a big sum.

Harsha Deposit

This scheme offers to save with pleasure and with convenience. No penalty is charged on

irregular remittance. Customer may enhance your installment upto 10 times your initial deposit.

An ideal deposit scheme for all, whose income is flexible and also for the salaried who may have

to incur unexpected expenditure.

Advances

Personal Banking schemes

Commercial & Institutional Banking schemes

Agricultural Banking schemes

Micro and Small Enterprises schemes (MSE)


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NRI Services

NRI Deposits

International Banking - Forex services

Performa for foreign currency remittances

Account opening form for non-resident Indians

Interest rates on NRE Deposits and schemes

Details of its correspondent Banks -Exchange companies with Draft drawing

arrangement with the Bank -Money Transfer to India Through Western Union -

Remittance facility through State Bank of India, New York Branch

Project Sbm

Documents

Transcript of Project Sbm